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Rectification order u/s 154

Rectification order u/s 154

Rectification order u/s 154 empowers income tax authority to: –

  1. Amend any order passed under any provisions of the Income-tax Act.
  2. Amend any intimation or deemed intimation sent under section 143(1).
  3. Amend any intimation sent under section 200A(1) or section 206CB

However in case If an order is the subject-matter of any appeal or revision, any matter which is decided in such an appeal or revision cannot be rectified by the Assessing Officer. In other words, the Assessing Officer can rectify only those matters which are not decided in such appeal.

Rectification by whom

The income tax authority can rectify the mistake on its own motion or tax payer can make an application to rectify the mistake. If the order is passed by the Commissioner (Appeals), then the Commissioner (Appeals) can rectify mistake which has been brought to notice by the Assessing Officer or by the Taxpayer.

Time limit for rectification

No order of rectification can be passed after the expiry of 4 years from the end of the financial year in which order sought to be rectified was passed. The period of 4 years is from the date of order sought to be rectified and not 4 years from original order. Hence, if an order is revised, set aside, etc., then the period of 4 years will be counted from the date of such fresh order and not from the date of original order.

In case an application for rectification is made by the taxpayer, the authority shall amend the order or refuse to allow the claim within 6 months from the end of the month in which the application is received by the authority.

If due to rectification of mistake, the tax liability of the taxpayer is enhanced or refund is reduced, the taxpayer shall be given an opportunity of being heard.

 

Procedure of making an application

Before making any rectification application the taxpayer should keep following points in mind: –

  • The taxpayer should carefully study the order against which he wants to file the application for rectification.
  • Many times the taxpayer may feel that there is any mistake in the order passed by the Income-tax Department but actually the taxpayer’s calculations could be incorrect and the CPC might have corrected these mistakes, e.g., the taxpayer may have computed incorrect interest in return of income and in the intimation the interest might have been computed correctly.
  • If he observes any mistake in the order then only he should proceed for making an application for rectification under section 154.
  • Further, he should confirm that the mistake is one which is apparent from the records and it is not a mistake which requires debate, elaboration, investigation, etc.
  • The taxpayer can file an online application for rectification of mistake. Before making an online application for rectification the taxpayer should refer to the rectification procedure prescribed at https://incometaxindiaefiling.gov.in/

For rectification of intimation under Section 200A(1)/206CB online correction statement is to be filed; the procedure thereof is given at http://contents.tdscpc.gov.in/en/filing-correction-etutorial.html

Rectification Order u/s 154

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